Laws:
ERISA-Employee Retirement Income Security Act
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The passage of the
Employee Retirement Income Security Act (ERISA) of 1974 established
a number of standards for what are generally termed health and
welfare plans. In general, the sections of ERISA that apply to
welfare plans are reporting, disclosure, fiduciary responsibility,
administration, and enforcement provisions of Title I of the Act.
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Disclosure-Summary Plan Descriptions- all employee
welfare benefit plans must disclose specified information to plan
participants-that is, to any employee who is eligible to receive
a benefit. All plans, regardless of the number or participants
covered, must provide a summary plan description to the participant.
This ERISA requirement is frequently overlooked by many employers.
Penalties and/or potential liabilities as a result of legal action
can result in significant losses to any employer regardless of
size. |
Clark Benefit Group works closely with our clients
to help ensure compliance with this aspect of the ERISA law.
Reporting-5500 Filings
- ERISA requires that an annual report be filed within seven months
after the close of the plan year. Use our link, "Reporting- 5500
Filings" to learn more about the newly revised 5500 Form. This
new form is to be used by all filers. To inform filers of the new
filing and processing requirements, PWBA has launched a dedicated
web site www.efast.dol.gov.
This site will provide filers with information about filing requirements,
electronic filing options and software availability.
HIPAA-Health Ins. Portability & Accountability Act
Medicare Secondary Payer
Rules
In 1980 Congress first moved to make Medicare the secondary payer
of health benefits in a variety of situations. Medicare is now the
secondary payer (pays second) for employer group health plans that
cover individuals with Medicare coverage based on the following situations:
- For beneficiaries with end-stage renal (kidney) disease- Medicare
is secondary to plans of all employers, regardless of the number
of employees.
- For workers and their spouses, who are age 65 or older- Medicare
is secondary to plans of employers with at least 20 employees.
- For disabled individuals younger than age 65- Medicare is secondary
to plans of employers with at least 100 employees.
COBRA- Consolidated Omnibus Budget Reconciliation
Act
The consolidated Omnibus Budget Reconciliation Act of 1985 requires
employers of 20 or more employees to continue health care coverage
for terminated employees and for the widows, ex-spouses and dependents
of employees, effective for plan years beginning after June 30, 1986.
Find out more about COBRA by using our link. This link will take you
directly to specifics of the law, sample forms.
The Family and Medical Leave Act (FMLA)
The FMLA became effective August 5, 1993, for most employers and employees.
This law covers only certain employers; affects only those employees
eligible for the protection of the law; involves entitlement to leave,
maintenance of health benefits during leave, and job restoration after
leave; set requirements for notice and certification of the need for
FMLA leave. The law also includes certain employer record keeping
requirements.
Texas Continuation
Texas House Bill 2055 has amended the Texas Insurance Code relating
to conversion/continuation.
- • You are eligible for this coverage if you lose group health
coverage and:
- You and your dependents have been continuously covered under the
group policy for at least three consecutive months prior to termination
of coverage.
The coverage termination was for any reason other than involuntary
termination for cause.
-
Your coverage if applicable, under COBRA or state dependent continuation
has concluded after the full eligibility period.
• You are not eligible if:
The original group coverage was replaced by similar coverage within
31 days of the discontinuation.
You are covered by Medicare.-
You have or are eligible for similar benefits under another group
or individual plan or under State or Federal Law (i.e. COBRA
or
State Dependent Continuation)
• Your Options
Continuation of coverage under the original health plan for a maximum
of six months. Monthly premium rate of as much as 102% of the
group
premium. This option is available to those persons whose COBRA
has expired.
A conversion policy with the same benefits as your employer's group
policy, the insurance co/health plan or your employer will tell
you the premium rate.-
A conversion policy with lesser coverage and benefits. Your employer
will tell you the premium rate.
Rules:
Participation - Insurance companies/health
plans require a specified amount of participation. This is true with
most all employer sponsored benefit plans - life, medical, dental,
disability, vision etc. Example - medical plans must be structured
in such a way to insure 75% of the eligible employees participate.
Employees who waive coverage because they are covered by a spouses
plan do not have to be counted as part of the eligible group. This
issue of participation is scrutinized heavily at time of plan inception.
More and more insurance companies/health plans are performing participation
audits on an annual basis.
Coordination of Benefits - Employees/insureds
may be covered by more than one medical plan. In this event, insurance
companies/health plans go through the process of coordinating the
benefits of both plans. This process begins with deciding which plan
is primary (pays first) and which plan is secondary (pays second).
Example- Husband is covered at work as an employee and as a spouse
on his wife's plan. The Insurance plan covering the husband as an
employee would be considered primary. Coverage through his wife's
plan would be secondary. Decisions as to children's coverage- primary/secondary
are decided usually by what is known as the Birthday Rule.
Waiting Periods - Employee Benefit Plans
usually are designed in such a way to require employees to wait
a
certain length of time before they become eligible for benefits-
1 month, 2 months, etc. This decision is made by the employer/plan
sponsor.
Once this decision is made, it is the employer's responsibility to
enforce this provision fairly and consistently in a non-discriminatory
manner- (requirement of ERISA).
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